Freedom Caucus threatens ouster as McCarthy rushes forward with debt-limit vote

Speaker Kevin McCarthy is rushing forward a vote on a bipartisan agreement to hike the nation’s debt limit until after the 2024 election, even as a brewing revolt from hard-right members of the House Freedom Caucus casts doubt on his future as leader.

The full House is set to vote on the debt-limit proposal on Wednesday, in time for the Senate to consider the deal before the June 5th default deadline. Mr. McCarthy expressed confidence that the legislation would receive the support of a majority of House Republicans and Democrats.

“I’m confident that we’ll pass the bill,” said Mr. McCarthy, California Republican. “If people are against saving all that money, or work reforms and welfare reform, I can’t do anything about it.”

House Minority Leader Hakeem Jeffries said he expected Mr. McCarthy to deliver at least 150 GOP votes for the deal and Democrats would provide the rest.

“My expectation is that House Republicans will keep their commitment to produce at least two-thirds of their conference – at least 150 votes,” said Mr. Jeffries, New York Democrat. “Democrats are committed to making sure that we do our part and avoid a default.”

While passage of the bill is likely, the real danger could come afterward for Mr. McCarthy. The more than 40-member House Freedom Caucus is accusing the speaker of having destroyed GOP unity with the deal.

“The Republican conference right now has been torn asunder,” said Rep. Chip Roy, Texas Republican. “No matter what happens, there’s going to be a reckoning about what just occurred, unless we stop this bill by [Wednesday].”

Rep. Dan Bishop, North Carolina Republican, even signaled support for ousting the speaker over the deal.

“I think it’s got to be done,” said Mr. Bishop, while clarifying that the decision would need to be made in “conjunction with others.”

The Freedom Caucus nearly tanked Mr. McCarthy’s speakership bid this year. In exchange for allowing Mr. McCarthy’s ascension, the group pushed through a rules package that decentralized the power of congressional leadership.

The crux of the overhaul rests on a provision letting any lawmaker force a vote on retaining the speaker. Given the narrow Republican majority, Mr. McCarthy can lose only four GOP lawmakers on any single House vote before having to rely on Democrats.

“If a majority of Republicans are against a piece of legislation and you use Democrats to pass it, that would immediately be a black-letter violation of the deal we had with McCarthy,” Rep. Matt Gaetz, Florida Republican, told Newsmax. “It would likely trigger an immediate motion to vacate.”

Neither Mr. McCarthy nor other congressional leaders are sweating the threat. Instead, the GOP and Democratic leadership are focused on actively whipping in favor of the debt-hike deal.

Mr. Jeffries and the White House are working to allay concerns that the deal’s welfare work requirements and energy provisions are too onerous. House Republicans, meanwhile, are working to sell the deal as the best possible outcome, given Democrats control the presidency and Senate.

Also on Tuesday, Senate Majority Leader Charles E. Schumer, New York Democrat, and Senate Minority Leader Mitch Mitch McConnell, Kentucky Republican, voiced their support for the agreement. 

Despite the lobbying, more than two dozen House Republicans have announced their opposition to the deal, and another 40 are still on the fence. The opposition is coming from not only hardline conservatives within the House Freedom Caucus, but also some moderate Republicans.

Rep. Nancy Mace of South Carolina, who has publicly broken with her party on abortion and former President Donald Trump, said she could not support the deal because it does nothing to fix the national debt.

“Republicans got outsmarted by a president who can’t find his pants,” said Ms. Mace. “I’m voting ‘no’ on the debt ceiling debacle because playing the D.C. game isn’t worth selling out our kids and grandkids.”

The debt-limit deal would allow the U.S. government to keep borrowing above the $31.4 trillion debt limit until January 1, 2025, which is a win for Mr. Biden, who didn’t want another showdown before the 2024 presidential election.

In wins on the GOP side, the deal would claw back $40 billion in unspent coronavirus relief and slash IRS funding. Mr. McCarthy secured an immediate $1.4 billion cut to IRS funding and then the agreement to cut another $20 billion over the next two years through the appropriations process.

The deal also keeps domestic spending flat for the upcoming fiscal year. Defense spending is set to grow by more than $26 billion. After this year, federal spending growth would be capped at 1% through 2025.

Mr. Biden wanted no spending caps. House Republicans initially sought a $130 billion cut to non-defense spending this year and a decade’s worth of spending caps. They also wanted to cancel Mr. Biden‘s student-loan forgiveness program and rescind more than $200 billion in green energy tax credits that Democrats passed last year.

“With a narrow majority in the House, we have the most conservative outcome we possibly could,” said Financial Services Committee Chair Patrick McHenry, North Carolina Republican. “I’m proud of the package. I wanted more. I absolutely wanted more, what we have here is better than what was about to come.”

Mr. McCarthy and Mr. Biden have further agreed to streamline the federal permitting process for new energy projects. The deal includes a pay-as-you-go provision requiring Mr. Biden to offset any rules or regulations that increase federal spending.

The legislation specifies, however, that the White House’s Office of Management and Budget can waive the new rule if it’s necessary for efficiency or the timely “delivery of essential services.” The bill further states that OMB’s waiver cannot be challenged by the courts.

“The OMB director has sole waiver authority to spend if it’s ‘necessary for program delivery.’ So that one line wipes out PAYGO,” Ms. Mace said. “These words on paper are totally meaningless if you read the fine print.”

In a clear win for Republicans, the deal would also expand work requirements for recipients of food stamps and direct cash payments. Able-bodied, childless recipients of each program 54 and younger would be required to work at least 20 hours per week to keep their benefits. The work requirements would expire in 2030.

Under the deal, childless food stamp recipients would be subject to new restrictions for how long they can collect the benefits. The deal does expand access to food stamps for veterans and the homeless.

“I’m not sure what’s in the bill people are concerned about,” said Mr. McCarthy. “Are they opposed to work requirements for welfare? Should someone continue to be able to sit on the couch if they’re able-bodied with no children and not be helped to find a job?”

Mr. McCarthy was buoyed Tuesday when a key GOP holdout on the House Rules Committee agreed to advance the debt limit deal. Rep. Thomas Massie admitted having reservations about the legislation, but agreed to send it to the House floor regardless.

“When people want to express their ideology, the floor of the House on the actual final passage of the bill is the place to do that,” said Mr. Massie, Kentucky Republican. “What do the 13 of us owe the rest of Congress? We owe them an honest shake and a level playing field that doesn’t change.”

The Freedom Caucus had designated the Rules Committee as the first battle in its effort to kill the debt limit proposal.

The panel, made up of 9 Republicans and 4 Democrats, is seen as a rubber stamp for whatever legislation the majority party wants to bring to the floor. Democrats on the panel usually oppose GOP initiatives on the basis of procedure, even if they plan to vote in favor of them on the House floor.

Freedom Caucus members hold two GOP seats on the panel and wanted to send Mr. McCarthy a message of disapproval by forcing Democrats to break precedent and bail out his debt-limit deal. Mr. Massie undercut the gamesmanship by providing the pivotal Republican vote in favor.

Rep. James McGovern, the ranking Democrat on the rules panel, did not clarify if he was ready to support the debt limit deal had Republicans faltered.

“If I were Speaker McCarthy, I would still believe that this is the speaker’s committee,” said Mr. McGovern, Massachusetts Democrat. “He’s got the committee that he wants … it’s the votes that matter.”